Tuesday, December 28, 2010

The Secret of China’s Success

In China’s REAL Competitive Advantage below, Kent Kedl uses a mix of personal experience and humour to argue that Chinese entrepreneurial spirit is in large part responsible fot the success of China today.

I found the blog entry on Technomic Asia's Web site. Technomic is a Shanghai-based consultant firm specialised in helping businesses enter Asian markets. The site offers plenty of useful information like the interview with Steve Crandell about the challenges of the chinese market for SMEs. Unfortunately, the blog section of the site does not seem to be active anymore. Yet, the older entries are worth reading.

Here is Kent Kedl's piece:

"On his first trip to China, one of my clients reacted to this country, as most foreigners do, with a mixture of fascination and utter dread. He was overwhelmed by the size of the country and its dynamic (one might say, hyper-dynamic) society. Over dinner one night, he asked me my opinion on the fundamental difference between China and other cultures. Now, I never miss the opportunity to pontificate on any subject, especially one that I don’t understand completely (see any of my previous columns). So I offered him my view: The fundamental difference between China and the rest of the world, I said, is that Chinese people are born entrepreneurs; they have an near manic compulsion to start their own business.

"Linguists believe that language is an accurate reflection of what a given culture considers important. For example, the Inuit are said to have 14 different words for snow – and so would you if you were knee-deep in the white stuff for most of your life. [Author’s note: I am from Minnesota, a state in the US where, for a good portion of the year, we, too, are surrounded by snow. However, unlike the Inuit, we do not have 14 words for snow; rather we have over 14 swear words for snow as in “that %$@# *&%$ &^%$# snow is so %$#! deep I cannot get my *&^% *&^$# car out of the *&^% driveway!!”.]

"The preceding sentence reveals that Americans attach great cultural importance to the vice of impatience. Indeed, we are a deeply disturbed people, and pity the person (the next guy that cuts me off on the Yannan Expressway) who pushes us beyond our limit, which, quite obviously, is way below the world norm.

"But I digress. The Chinese language reflects the entrepreneurial spirit of the people in a variety of ways. For instance, the term “start up”, referring to opening a business, can be expressed, alternately, as: 成立 (cheng li), 建立 (jian li), 开 (kai), 设立 (she li), 办 (ban), 创立 (chuang li), 创办 (chuang ban). There are more ways to express this sentiment, but I have forgotten them. What’s more, I cannot distinguish between the phrases; their subtleties are lost upon a lout like me. But one thing I do know, they all mean: “Let’s make some money!”

"Should you remain unconvinced by the linguistic proof of China’s entrepreneurial obsession offered above, well, just step out on into the street. You’ll be instantly bombarded with pitches to purchase just about anything you’ll ever need (and much that you’ll never need). If you happen to be driving and happen to stop at a stoplight (unlikely, I know), then you’ll be assaulted by a dozen guys loaded with all things automotive: newspapers, lighters, phone chargers, steering wheel covers, Shanghai maps (because you look lost) and even world maps (because you really look lost). Now, I’m not saying that the Chinese are the only people with excessive entrepreneurial drive. But they do bring a degree of optimism and can-do spirit to the idea that most others cannot match. Indeed, they sometimes bring too much.

"A while ago, I was walking through a street market with my kids. Within seconds, we were surrounded by hawkers. Now the interesting feature of street market vendors in China is the aggression with which they pursue their trade. As you walk by the stalls, they will yell out “HELLO!!” followed by a recitation of what they are selling. To wit: “Hello DVD!!”, “Hello CD!!”, “Hello T-shirt!!!”. It can be a bit disconcerting, but one gets used to it … I suppose as one eventually gets used to a root canal or open heart surgery if one has had enough of them.

"Anyway, one merchant was touting figurines of a little boy, who, after pouring hot water on his head, tinkles. The hawker shouted at me in the template style: “Hello, Pee-pee boy!”. Many heads turned, I assuming, hoping to see some tall foreigner in Depends fighting valiantly against incontinence problem. The man’s sales tactic might be a tad suspect, but there was no denying his enthusiasm. He knew that I wanted and needed a statuette of a small boy relieving himself. What he didn’t know is that his remark would take on a life of its own. When someone calls for me at home and one of my teenage daughters answers the phone, they have been known to shout: “Hey, Pee-pee Boy … phone!”

"Of course, the entrepreneurial spirit exhibits itself in other ways, the notorious gauntlet tactic, for example. This ploy is based on the theory of sales by attrition. Street vendors seems convinced that you will buy from them if they form a gauntlet that you cannot avoid. By the time you reach the forty-seventh guy, you will be so worn down that you will purchase a DVD, CD or fake watch because you are finally convinced that life is not worth living without one.

"Westerners believe that China’s low cost labor provides it with a global competitive advantage. While it helps, I believe that it is China’s drive to start new ventures – and to do so with such wild abandon – that presents a greater challenge to other economies.

"The Pee-pee Boy tinkling on my desk is proof positive."

1 comment:

  1. Really funny! Somehow does not think it is the key difference/driver. Chinese, very much like Indians, are fueled by survival of the fitest/fastest living in multi-billionsm people societies. Like the 5 dragons of ASEAN grew at an amazing rate over the past 20 years, people will do anything to make a buck and succeed, because they need to survive, and most of them don't have much to lose... so full steam ahead doing anything is better than doing nothing! On the contrary, Western Europeans and Americans have a lot of wealth to lose, hence their valuation of time is higher and they are slower and more selective about their undertakings. We will see if the Chinese or the Indians are true entrepreneurs when their middle-class will have some serious wealth to lose and so extra fat from eating too much... THEN, and only THEN, they will be genuine entrepreneurs if they risk their assets/wealth into a new venture. I'd say less than 1% of any society is trully entreneurial DNA... but like you, I love to pontificate on topics I don't know anything about LOL! Cheers Eric